• This column is brought to you by [Your Hedge Fund’s Name Here]. You collectively manage trillions and we in the media business need advertising revenue. Many of us won’t tell you if advertising is a bad idea, even if it’s a really bad idea.

• Don’t run ads next to Lowes or Home Depot. Some people may get the mistaken impression that a hedge fund is a layaway plan for shrubberies.

• Explain what a hedge fund does: Every year we take 2% of your assets, and 20% of your profits, because ordinary index and exchange-traded funds, and their incredibly low management fees, are too pedestrian for a sophisticate like you.

• Don’t forget, a rich rube is still a rube.

“Just because you have a $1 million net worth, doesn’t mean you are a sophisticated investor,” said Andrew Stoltmann, a Chicago lawyer who represents investors in securities lawsuits. Though hedge funds can now advertise to the teeming masses, they can only take money from qualified investors, defined as folks with at least $1 million in assets, not including their primary residence, and $200,000 a year in annual income. That still opens up an orchard full of not-too-sophisticated investors ripe for the picking — up to 7% of U.S. households, the Securities and Exchange Commission estimates. Hedge-fund advertising, Stoltmann said, will try to target “the dentist or doctor, with a $5 million net worth, who got a tip at the country club that hedge funds are the place to be.”

• What you say in an advertisement can and will be used against you in a court of law. Count on lawyers to come knocking on your mahogany doors if you start losing the nest eggs you’ve gathered from thousands of individual investors.

• Never brag: We make way more money than Fortune 500 CEOs and pay a lower tax rate than Mitt Romney. Don’t even say this at your high school reunion.

• Here’s a slogan: We’ve got your pensions in our pockets. Institutional investors have long flocked to hedge-fund managers in their constant chase for performance, putting the life savings of cops, firefighters and public employees in the hands of high rollers.

• Eliot Spitzer can ask for redemption, but don’t you dare. Explain that a hedge fund isn’t a haughty mutual fund. It’s typically a limited partnership and its investors are very limited.

• Sorry, we’re closed. That’s the sign you can hang in your window when performance lags and redemptions mount. Send everybody a check with whatever is left and start a new hedge fund in the morning.

Frozen Assets Create Hot Nightspot

(2:38)

Minus5 Ice Bar inside the New York Hilton Midtown has customers stand in line on a sweltering night, and pay hefty cover charges to get inside. But many don't stay long because everything is made out of ice. Al Lewis gives us the chilly details.

• Hot babe, hot product. Hot babe, hot product. In the advertising world, you never hear anybody complain that the constant juxtaposition of a beautiful woman and any product is getting old, or cliché, or just plain lame. No one ever tells an ad agency: That’s pretty much the same concept we ran last time; why are we paying you millions of dollars, again? This is simply the best idea the advertisers have. It works for beer. It works for insurance. Even women who deplore shameless sexism have been desensitized to this ceaseless depravity, and can be swayed, by these ads. Nevertheless, Cynthia Hetherington, a financial intelligence and investigations consultant in Wayne, N.J., advises hedge funds to have some class. The largest, most legitimate, most established hedge funds have the most to lose if the world becomes cluttered with schlocky hedge-fund ads. She says hedge funds should take a cue from classy investment managers such as BlackRock. “Do you see BlackRock putting babes in bikinis in their advertising?”

• Some people will suspect you’re a fraud just for advertising a hedge fund, just as lawyers are often perceived as ambulance chasers for their commercials. There’s plenty of fraud in the hedge fund industry to support this view, from insider-trading cases to blatant Ponzi schemes. SEC commissioner Luis Aguilar, a lone dissenting voice on the commission, called the agency’s move to lift the advertising ban “reckless.” He said it “will make fraud easier by allowing fraudsters to cast a wider net for victims.”

• Take a cue from Ally Bank . It’s been owned by the U.S. government since 2008, but convincingly advertises the follies of every other bank: Yeah, and how about a hedge fund, too?

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